Scrap metal dealers are being told they must become licenced or face a £5,000 fine under a new council mandate.

From the beginning of October, scrap dealers in Barking and Dagenham will have to have one of two types of council issued licence — one for fixed premises and another for mobile collectors.

The move is in line with new government legislation that aims to make it harder for thieves to sell stolen scrap metal

Cllr Jeanne Alexander, cabinet member for crime, justice and communities, said: “Theft of metal is a significant problem in this borough so we welcome this legislation because it will give us some control over who is allowed to deal in scrap.

“Legitimate traders have nothing to fear. In fact this will make their lives easier because they will be able to demonstrate to customers that they are working within the law.

Barking and Dagenham is in the top five boroughs nationally for scrap metal thefts and has 69 registered scrap metal dealers, of which 30 operate from premises and 39 work as mobile operators.

Licences have been costed so they will not bring any profit for the council, said a spokesman, with a three year premises licence costing £420 and £320 to renew.

Holders will have to display their licences in a prominent position in their premises, or for mobile operators, in a place on the vehicle that is clearly visible.

“Anyone selling scrap metal should ensure they only deal with licensed enterprises. If anyone offers to buy your scrap, make sure you see their licence. They should also make a record of your identity so any transaction can be traced,” added Cllr Alexander.